Weekly World News(15th March-21st March)

UK private rental sector
landlords more secure, new research suggests

Landlords in the UK are reporting that
the incidence of void periods are falling, which is good news for the wider
private rented sector.

It
isn’t just the incidence of voids that are decreasing, indeed the duration of
the average void period is falling too, according to research by BDRC
Continental commissioned by Paragon Mortgages.

Some
34% of landlords said they had experienced at least one void period in the last
quarter of 2013 compared with 36% in the third quarter. The average duration of
a void period was 59 days in the final quarter of 2013 compared to 64 days in
the third quarter and 69 days in the second quarter.

Landlords
were also asked, where they had experienced a void, how they cover the
financial impact. Those small scale landlords with only one property were more
likely to cover any shortfall using either their own savings (17%) or from
other income (19%).

A
quarter of all landlords said they would cover it with rental income from other
properties, 10% would look to absorb it and 16% would use cash reserves that
had built up whilst the property was occupied.

‘It
is good to see that void periods are less frequent and getting shorter. What is
also important to note is the resilience of landlords when coping with a
shortfall of income on an individual property, this provides further insight
into just why the credit quality of buy to let lending is so much better than
regular mortgages,’ said John Heron, director of mortgages at Paragon.

The
same research revealed that landlords experienced a reduction in the level of
tenant arrears in the fourth quarter of 2013. The average number of tenants in
arrears remained low at around two against a portfolio size of 11 properties.

Of
those landlords surveyed, 28% of landlords said that they were concerned about
rental arrears in the next 12 months.

In
terms of other areas of concern for landlords, 31% said that they had property
which had been damaged by tenants and 15% had problems with anti-social
behaviour.

The
survey also shows that landlords are more secure financially with just 1% of
landlords saying that they had missed a buy to let mortgage repayment in the
fourth quarter of 2013.

UK mortgage industry
expects the early demise of Help to Buy phase two

Mortgage lenders and brokers have
credited the second phase of Help to Buy with the biggest impact so far of the
government’s flagship two part scheme for home owners but are now predicting an
early end to the popular scheme.

One
year on from the policy's unveiling in the 2013 Budget, new research from the
Intermediary Mortgage Lenders Association (IMLA) uncovers widespread
expectations that this second part of the scheme will be curtailed ahead of
schedule.

IMLA’s
latest Intermediary Lending Outlook report reveals a consensus that the
second phase of Help to Buy has been the most critical factor in boosting
access to 95% loan to value (LTV) mortgages to date.

Some
78% of brokers and 77% of lenders see this part of the government scheme as a
major driver in improving conditions for borrowers with 5% deposits.

Significant
numbers also credit Help to Buy with a key role in boosting the appeal of new
build homes through its equity loan offering with 69% of lenders and 51% of
brokers supporting this view.

Overall,
brokers judge Help to Buy to have been more influential in restoring confidence
among builders than consumers. Some 50% see it as a deciding factor in boosting
the outlook for the construction industry, compared with 42% for consumers. In
contrast, 45% cite a wider range of factors behind the return of consumer
confidence.

The
report also shows that over inflated house prices remain the number one threat
to the success of Help to Buy according to brokers and lenders. IMLA’s recent
report What is the new ‘normal’? demonstrates that mortgage lending volumes are
far below historic levels in real terms, yet these new findings suggest the
industry recognises the need to monitor house price growth over the duration of
Help to Buy.

Unattractive
mortgage product pricing is the concern which has grown the most since last
summer, with 51% of brokers citing this as a threat compared with 36% in July
2013. A number of lenders have launched competitive mortgages at 95% outside
Help to Buy, which helps to explain why an over-reliance on government support
has become less of a worry overall.

Half
of brokers and 49% of lenders predict that the mortgage guarantee scheme will
be withdrawn early, despite its perceived impact so far. Even more, 54% and
75%, expect that the scheme will be withdrawn early for remortgages, which are
currently allowed under the scheme for customers transferring their existing
loan to a new lender.

Despite
these predictions, all lenders 89% of brokers see 95% LTV mortgages as an
essential part of a healthy mortgage market. Such loans were an established
part of the UK mortgage market before the downturn and Help to Buy has helped
to stimulate a recovery in the number of 95% LTV products available.

The
Help to Buy equity loan scheme for new build homes is judged to have the
biggest chance of being extended beyond its current end date of March 2016.
Some 23% of lenders and 18% of brokers expect to see this part of the scheme
prolonged.

‘These
findings throw the spotlight on crucial policy decisions that must be thought
through to safeguard the recovery in mortgage lending and house building. The
overall Help to Buy scheme has delivered a much needed boost over the last
twelve months and we would certainly be looking at a more subdued supply
situation without it,’ said Peter Williams, executive director of the IMLA.

‘In
particular, Help to Buy 2 has helped to reopen the higher LTV market after the
downturn. This has done much to transform the hopes of first time buyers who
can afford a mortgage but struggle to save an initial deposit. There are few
clearer drivers for more homes to be built than aspiring buyers returning to
the market,’ he pointed out.

‘The
Help to Buy factor has been important in getting growth underway, restoring a
sustainable market and moving us towards a position where consumers can access
affordable loans without the need for government support. Whether or not the
scheme runs its full course is less important than making sure we have a self
sustaining market in place going forward. The evidence suggests that we have an
entrenched mortgage market recovery which can survive its withdrawal,’ he
explained.

‘However,
situations change and the industry is facing a considerable uplift in
regulatory controls over the next two years. It will be essential to track how
those bed in and what their consequences are for specific market segments.
Armed with that understanding we can then be much clearer as to how and when we
might best phase out the government schemes,’ he added.

According
to Simon Crone, vice president for mortgage insurance Europe for Genworth, the
difficulties facing first time buyers have not been resolved by any stretch of
the imagination. ‘Housing inflation is set to make that first step onto the
housing ladder an even greater challenge for many. We need to ensure that
responsible borrowers who would struggle to save 10% or 20% deposits are not
forgotten when Help to Buy comes to an end especially if this happens sooner
than expected,’ he said.

‘The
IMLA research emphasises that 95% loan to value mortgages are a crucial part of
the mortgage product range. Directly or indirectly, the government guarantee
has worked wonders to improve consumer choice. Insurance gives more lenders the
confidence to support buyers who are only able to save a smaller deposit, and a
bigger role for private schemes would remove the risk to taxpayers and end the
reliance on government,’ he pointed out.

‘The
growing number of 95% mortgages launched in the last six months with ever more
competitive rates has relied on a combination of insured and uninsured
products. Even if Help to Buy 2 fulfils its term and runs until 2016, planning
needs to begin now so that change doesn’t upset the balance and lenders don’t
desert the market. Lenders and builders need the government to outline its
thinking now and present a longer term, viable solution to support responsible
borrowers with smaller deposits,’ he added.

Property price discounts in
UK at lowest level for four years

The proportion of UK properties
currently on the market for sale with a reduced asking price has fallen to its
lowest level in four years according to new research.

The
latest report from property website Zoopla shows that of all properties
currently available for sale, only 27% have had their asking price reduced from
their original level.

This
is down from 31% three months ago and significantly below 2011 when 40% of
properties on the market were being discounted in order to attract a sale.

It
also shows that the size of the average price reduction has also fallen over
the last three months with motivated sellers now offering average discounts of
6.25% or £20,782 off the original asking price, down from 6.45% or £21,451 in
November.

Wakefield
tops the list of places with the highest proportion of price reduced properties
on the market today, with 42% of homes for sale there having been discounted
from their original level.
Barnsley at 38% and Rotherham at 37%, come in second and third on the list of
places with the highest level of motivated sellers. The biggest discounts can
be found in Newcastle upon Tyne, where the average asking price reduction
currently stands at 8.9% or £19,425.

London
comes top of the list of places with the lowest proportion of discounted
properties on the market. Of all the homes currently for sale in the capital,
only 15% have seen their asking price reduced from their original level.

Edinburgh at 20% has the second lowest proportion of discounted properties with
Coventry in third place currently at 24%.

‘The
government’s Help to Buy scheme, increased availability of mortgages and
confidence in the economy have all helped to invigorate the property market at
the start of 2014. This has driven a rise in demand among buyers and helped
reduce the pressure being felt by sellers to discount their properties,
particularly in London, where competition for quality property remains fierce,’
said Lawrence Hall of Zoopla.

‘While
this is good news for sellers, buyers need to see more stock come onto the
market over the coming months otherwise the recent trend of rising prices is
likely to continue as spring takes hold and more buyers decide to search for
property and create further competition,’ he added.

Aberdeen named as UK
property hotspot with homes selling in just nine days

Aberdeen is the UK’s new property hot
spot with properties in parts of the city selling in an average of just nine
days, new research shows.

Three
Aberdeenshire postcodes took the lead as the fastest selling hot spots with a
further three featuring within the top 20, according to the latest research
report from residential property company Move with Us.

The
research, conducted in conjunction with Home.co.uk, reveals that properties in
postcode areas AB22 are selling in an average of just nine days, with AB12 and
AB32 taking second and third places.

Other
fast moving locations in the UK were Sutton near London where properties in the
postcode SM5 are selling in just 15 days. This was closely followed by CB1 in
Cambridge and BS7 in Bristol with 16 and 18 days respectively.

The highly skilled workforce in the leafy city of Cambridge combined with fast
commuter times to London are cited as reasons for its quick property sales. The
shortage of properties for sale combined with increased buyer numbers due to
Help to Buy have created a fast paced market in Bristol, according to the
research report.

It
will come as no surprise that properties in London were also among the fastest
sellers in the county, with the top areas being SE2 in Bexley, SE17 in
Southwark and EC4 in the City of London, taking an average of 13, 17 and 20
days to sell respectively.

‘The
postcodes in the top 20 highlight areas where there is a skilled workforce,
indicating higher wages and subsequently a fast paced property market,’ said
Robin King, director of Move with Us.

‘In
such a fast moving market, for a buyer to be in with a chance of securing their
ideal property, they will need to ensure they have a mortgage agreed in
principle and are legally prepared early on in the process so that contracts
can be issued by their solicitor within 48 hours of an offer being accepted.
Without these things in place, buyers will often lose out to cash buyers and
savvy investors,’ he explained.

According
to Bob Fraser, Senior property partner from law firm Aberdein Considine, demand
in the current market is predominantly in flats anywhere within a commutable
distance of Aberdeen.

‘The region attracts a large number of highly paid workers in the oil and gas
industry. Due to high rental yields in the region, the higher level workers in
the industry often buy property and lease it to the newcomers who are often on
shorter contracts,’ he said.

‘Over
the last few years the top end of the market has been driving sales in the area
with an increase in the number of four to six bedroom family homes being built
which are marketed in excess of half a million pounds. These move in slightly
slower timescales than flats,’ he pointed out.

‘Now
the market has returned to a more traditional model with lower end properties
driving sales. “Off the back of a busy autumn we now have over subscribed
demand and a shortage of supply of properties which means properties are
selling extremely quickly,’ he added.

17th March 2014

Millions of first time
buyers want to buy a home in the US, new index shows

More than four million first time
buyers want to enter the housing market in the United States in 2014, buoyed by
strong housing market confidence, it is claimed.

Home
ownership aspirations is highest among people who are currently renting their
homes and in markets hardest hit by the housing recession according to a new
index from Zillow.

The
firm’s inaugural Housing Confidence Index stands at 63.7 and it shows that if
all renters indicating they want to buy a home in the next year actually did,
it would represent more than 4.2 million first time home sales.

Renters
in Miami, Atlanta and Las Vegas expressed the most desire to become home owners
and but their aspirations are unlikely to be realized soon as home ownership
headwinds persist, the firm points out.

Barriers
include tight inventory, rising mortgage interest rates and growing
affordability problems in a handful of areas, and these may make it difficult
for potential buyers to follow through on those aspirations as the market
enters the busy spring home shopping season.

In
19 of the 20 large metro areas surveyed, more than 5% of all residents
indicated they wanted to buy a home in the next year. Among current renters,
homeownership aspirations were particularly strong, with about 10% of all
renters nationwide saying they would like to buy within the next 12 months.

The
vast majority of these respondents also said they were confident or somewhat
confident they could afford home ownership now.

If
all renters that indicated they wanted to buy actually did purchase a home in
the next year, it would represent more than 4.2 million first time home sales,
more than double the roughly 2.1 million first time home buyers in 2013.

While
inventory is up 11.1% nationally compared to a year ago it still remains well
below optimal levels, and has fallen year on year in eight of the 20 metro
areas surveyed by the index.

Zillow
also points out that recent data from the Census Bureau indicates that the
share of new homes built as rental units has grown, while the share of new
construction dedicated to the kinds of single family homes likely to be
favoured by first time buyers is down.

Mortgage
interest rates are also on the rise, currently standing at about 4.2%
nationally, according to the Zillow Mortgage Marketplace, well above 2013 lows
of roughly 3.3%.

And
as interest rates rise, homes in a number of particularly hot markets,
including San Francisco, Los Angeles, San Jose and San Diego, are already
looking unaffordable for buyers with lower incomes, especially first time
buyers, as more income is devoted to mortgage payments.

‘For
the housing market to continue its recovery, it is critical that homes are both
available and remain affordable to meet the strong demand these survey results
are predicting, particularly from first time buyers,’ said Zillow chief
economist Stan Humphries.

‘Even
after a wrenching housing recession, this data shows that the dream of
homeownership remains very much alive and well, even in those areas that were
hardest hit. But these aspirations must also contend with the current reality,
and in many areas, conditions remain difficult for buyers. The market is moving
toward more balance between buyers and sellers, but it is a slow and uneven
process,’ he explained.

While
it is reassuring to see all of the headline indices in positive territory, the
underlying indicators of home ownership aspirations, housing market conditions
and expectations for each metro area and tenure segment reveal significant
variability,’ said Pulsenomics founder Terry Loebs.

‘Several
of these drivers of overall housing confidence registered negative or only
marginally positive readings in some cities. These data confirm that real
estate recovery and economic healing are relative, local phenomena, and in some
instances, likely reflect the lingering psychological impact of the housing
bust,’ he added.

18th March 2014

Shortage of property in the
UK means eight new buyers after every new instruction

Eight new buyers are chasing every new
property instruction in the UK and new buyer registrations have risen by over
quarter, according to new research.

The
report from Sequence, owners of over 300 branches of estate agents around the
country shows just how buoyant the residential real estate market is.

It
points out that the average UK house price has increased by 12% annually but
did fall 1% in February compared with the previous month. Sales are also
rising, up 17% annual and 7% month on month.

According
to the firm’s data the average house price is now £207,412. But prices have
been rising even more in London, up 22% annually, but they were down 4% month
on month. Nevertheless, the average house price in London is now £441,256.

First
time buyers are not being put off by the house price rises and mortgage
applications from first time buyers were up 7% month on month in February, and
up 13% annually. The firm says that new buyers are flooding the market.

Sellers
are also boosting the market, and mortgage applications from this group are up
5% month on month and 18% annually.

‘Activity
in the market and competition for property across the country is heating up as
we edge closer to spring. Fuelled by attractive mortgage products, the number
of new buyers registering has risen by 26% annually and there are now eight
buyers chasing every new instruction,’ said David Plumtree, chief executive at
Sequence.

‘The
shortage of available property is resulting in rapid price growth, with the
average UK house price now 12% higher than this time last year and showing no
signs of slowing down unless the supply/demand imbalance is rectified,’ he
explained.

He
also pointed out that in London over 13 new buyers continue to compete for every
new instruction, with the number of new buyers registering increasing by a
quarter, annually. The number of new instructions is rising by just 13% as
prices continue to grow, up 22% annually.

‘With
the Government’s redirection of finance from the Funding for Lending Scheme and
interest rates expected to rise sooner rather than later, home owners
considering selling should seize the window of opportunity now,’ he added.

Upward trend in new buyers
in the UK easers off, surveyors report

The continuing increase in would be
buyers in the UK eased off to the lowest point in almost a year during
February, as the initial clamour from those previously shut out of the property
market started to relent, a new survey shows.

Last
month buyer numbers increased at their slowest rate since March 2013 as the
initial surge in demand, driven by the more accessible housing market, started
to slowly level off, according to the February Residential Market Survey from
the Royal Institution of Chartered Surveyors (RICS).

It
reveals that this trend was seen across most areas of the country with only
Yorkshire and Humberside seeing anything by way of meaningful increases in
buyer growth, and that followed a flat January in the region.

Perhaps
unsurprisingly, activity was particularly limited in regions in the South West
where flooding and adverse weather conditions appear to have significantly hit
both the supply of properties coming up for sale and buyer demand. It remains
to be seen what impact the floods will have on local and regional markets over
the coming months.

Once
more, the amount of homes coming up for sale failed to pick up and, although
buyer demand is gradually starting to slacken, supply is still falling well
short of required levels.

Moving
on to prices, the cost of a home in the UK continued to rise during February,
albeit at a slightly slower pace than in previous months. Last month 45% more
chartered surveyors saw prices rise rather than fall. The cost of a home has
now risen across the country for 11 consecutive months.

Looking
ahead, respondents predict both prices and transaction levels to continue to
increase as we enter the summer months where the market traditionally starts to
pick up.

‘The
growth in buyer numbers that we've seen for some months started to slow down in
February, as the surge in interest sparked towards the end of last summer began
to level off.,’ said Simon Rubinsohn, RICS chief economist.

‘While
this certainly doesn't mean an end to the increasing activity we've been seeing
recently, it does suggest that the pent up demand generated throughout the
downturn is gradually exhausting itself. One other factor influencing behaviour
over the past month may be the weather as rain, wind and, in particular, floods
tend to mean fewer people are willing to actually get out there and view
houses,’ he explained.

‘The
ongoing issue that we are facing, however, is the lack of homes coming onto the
market. Yes, it is true that more and more are being built, but supply is
simply not enough properties to satisfy demand. As a result, prices are likely
to continue to move higher making it ever harder for people to take an initial
step foot onto the property ladder,’ he added.

Help to Buy for new homes
in UK to be extended to 2020

The UK government’s flagship Help to
Buy scheme phase one is to be extended until the end of the decade, it has been
announced.

The
scheme which allows buyers of new homes to access a government backed loan of
up to 20% of the cost of a property has been hugely popular and credited with
boosting the real estate recovery.

Chancellor
George Osborne has confirmed the move ahead of his Budget which will be
presented to Parliament later this week.

He
told the BBC that the Help to Buy scheme phase one which was due to end in 2016
will no be available until 2020.

He
also confirmed that the UK’s first new garden city for 100 years will be built
in Kent and initially create 15,000 new homes. The site chosen is at Ebbsfleet.

He
is expected to announce on Wednesday that he fully backs the upturn in
construction in the property world and that getting Britain building is
regarded as a key to helping the economy improve even more.

He
said that the extension of Help to Buy will support the construction of 120,000
new homes. But others have already warned against such a move, most notably
Bank of England governor Mark Carney who feels it needs to be watched to avoid
a property price bubble, especially in London and the South East of England
where prices are rising faster than elsewhere in the country.

Under
Help to Buy, the government lends a prospective home buyer up to 20% of the
cost of their new build home so a buyer needs only a 5% cash deposit and a 75%
mortgage to make up the rest.

The
extension applies only to the first phase of the scheme, which is for new build
homes. There is likely to be no changes to phase two of Help to Buy which
provides mortgage guarantees for banks lending to buyers with small deposits.

Grainne Gilmore, head of UK residential research at Knight Frank, said that the
decision to extend the Help to Buy equity loan will be welcomed by house
builders. 'The extended time frame of the scheme will aid the progression of
larger and longer term development schemes, crucial in helping boost house
building to levels that the government wants to achieve,' she explained.

She
also pointed out that the take up of the scheme so far is fairly evenly spread
across the country, with the most equity loans being taken out in Leeds,
suggesting that it is providing broad based support to house building across
England.

'The
question now is whether the Chancellor will adjust the parameters or the £12.5
billion set aside for Help to Buy part 2, the mortgage guarantee, to cover the
additional £6 billion cost of this four year extension to the equity loan,' she
added.

According
to the latest figures, nearly 15,000 properties have been bought using the
Government’s Equity Loan since April last year. The new data shows that, in
January, nearly 2,000 mortgages were agreed across England using the scheme, a
slight slowdown compared to the final three months of 2013 when some 7,500
mortgages were agreed, an average of 2,500 per month.

Meanwhile the property indistry, including the Royal Institution of Chartered
Surveryors (RICS) and the National Association of Estate Agents (NAEA) is
calling for changes to Stamp Duty, stating that it will help to boost the
property market.

They
both point out that it is a tax that is unfair and hugely expensive and that
its slab structure is actually restricting home ownership.

Some
industry players believe that thresholds at the lower end of the market need
particular adjustment as they clearly need bringing in line with the up to date
value of property prices. One suggestion is that properties valued up to
£250,000 should be changed to 0% and then a flat 2% on anything over this
price. They add that although the amount raised from each property will go down
overall it will even out due to the rise in transactions.

Residential property value growth in
capital cities in Australia didn’t really move last month with the market
pausing for a breather, according to the latest RP Data Rismark home value
index.

The
combined capital cities index recorded no change overall during February with
Sydney, Hobart and Darwin the only capital cities to record a slight lift in
dwelling values.

The
index recorded zero month on month growth. This follows eight successive
monthly increases where dwelling values rose by 10% and values are up 13.2%
since June 2012. Also, recent growth has taken capital city dwelling values to
4.8% higher than their previous peak in October 2010.

‘The
February market results are in stark contrast to earlier readings where capital
city dwelling values moved 2.6% higher over the past three months. The
likelihood is that the weak reading for February is an adjustment from the
strong readings in December and January rather than the beginning of a flat to
negative growth phase across the macro level housing market,’ said TP Data
research director Tim Lawless.
Additional metrics tracked by RP Data show that buyer demand remained very
strong in February with RP Data’s valuation platforms recording a record month
for average daily levels of mortgage related activity. Also, auction clearance
rates remained strong and with little slippage in vendor discounting levels or
average selling times.
However, Lawless said there will need to be further months of flat to negative
movements before it can be said confidently that the housing market is slowing.

‘Our
view is that housing market conditions will start to wind down later this year
as affordability constraints and low rental yields dampen market conditions.
Additionally, with a belief that mortgage rates are likely to start tightening
later this year, it may help to quell some of the exuberance we have been
seeing,’ he explained.
Rismark International chief executive officer Ben Skilbeck, pointed out that
Sydney continued to be the standout performer. ‘When looking at individual
capital cities, the Sydney market has had a surprising run of nine successive
month end increases totalling 14.1%. In keeping with what other capital cities
have experienced, we would have expected some dips along the growth trajectory
over a nine month period,’ he said.

‘Despite
the recent strong Sydney capital gains, over the past decade Sydney values have
compounded at just 2.9% per annum. Arguably this market is playing catch up
before settling into a more sustainable rate of growth,’ he added.
The February results show that the premium end of the housing market continued
to gather pace while at the more affordable end of the market, capital gains
have been slowing.

Dwelling
values across the most expensive quarter of capital city housing markets are up
3.8% over the three months to February 2013, and 6.8% over the past six months
while homes at the most affordable end of the market have seen values remain
flat over the past three months and have risen by a lower 3.5% over the past
six months.

Lawless
said the stronger performance of premium properties as the growth cycle matures
is typical. ‘We saw the same trend in 2009 where the most expensive market also
recorded the strongest capital gains, as well as during the 2007 growth cycle.
The trend is likely being compounded by the low number of first home buyers
active in the market place who normally drive demand at the more affordable
price points,’ he explained.

Although
rents are rising, rental yields have suffered over the past growth cycle due to
capital gains outpacing rental markets. The bi-product of strong capital gains
combined with less impressive rental growth has been yield compression.

‘Since
June 2012 dwelling values are up slightly more than 13% while rents have risen
by less than 5%. Gross dwelling yields have slipped from 4.3% in May 2012 to 4%
and are as low as 3.4% for the typical Melbourne detached house,’ Lawless
pointed out.

Looking
forward, Skilbeck said that uninterrupted successive month on month increases
are unlikely even in the event positive market environments and high auction
clearance rates are maintained.

‘Factors
such as seasonality, buyer sentiment, perspectives on aspects contributing to
future affordability and vendor expectations all contribute to market
volatility. As with any market, it takes two or three months for trends to be
differentiated from natural market volatility,’ he explained.

‘In
particular, it will be interesting to see whether Brisbane’s 2% decline this
month is simply natural volatility or if it’s indicative of the city’s struggle
to trend toward its 2009 peak,’ he added.

21st March 2014

US home prices expected to
rise 3% in next 12 months, says latest forecast report

US property prices are expected to rise
3% in the next 12 months but growth will depend on location, according to the
latest real estate market report from Zillow.

The
Zillow Home Value Index rose to $169,200 in February, up 5.6% year on year and
the number of homes listed for sale on Zillow was up 5.5% annually.

However,
the firm says that as the spring home buying season heats up, buyers and
sellers nationwide can expect very different experiences when it comes to
negotiating power. According to the latest Zillow analysis of national buyers'
and sellers' markets, sellers in the West will likely have the upper hand in
negotiations when selling their home, while buyers in Midwestern and East Coast
metros will likely face less competition and have more room for bargaining on
prices.

The
Bay Area, San Antonio and Los Angeles are the top prospects for sellers and
Cleveland, Philadelphia and Tampa the top of the list for buyers, according to
Zillow.

In
this analysis, a sellers' market is not necessarily one where home values are
rising, but rather one in which homes are on the market for a shorter time,
price cuts occur less frequently and homes are sold at prices very close to, or
greater than, their last listing price. In buyers' markets, homes for sale stay
on the market longer, price cuts occur more frequently and homes are sold for
less relative to their listing price.

The
real estate data in markets on both coasts are telling markedly different
stories, the report says. ‘Relatively strong job markets in the West are
helping spur robust demand, which is being met with limited supply, causing
rapid home value appreciation and giving sellers an edge. In the East, housing
markets are appreciating a bit more slowly, and homes are staying on the market
longer, which helps give buyers the upper hand,’ said Zillow chief economist
Stan Humphries.

‘In
general, buyers in sellers' markets this spring can expect tight inventory,
increased competition and a greater sense of urgency. Sellers in buyers'
markets may need to be prepared to lower their asking price, or to wait longer
for the perfect buyer to come along,’ he explained.

‘As
we put the housing recession further in the rear view mirror, the broad based
dynamics that applied during those days, when all markets were reacting
similarly to nationwide economic conditions, are fading. Real estate has always
been local, and as the spring market gains momentum, this old adage will only become
more pronounced,’ he added.

He
also pointed out that but both monthly and annual US home value appreciation
slowed to their lowest paces in months. National home values were almost flat
in February from January, and were up 5.6% from February 2013.

The
pace of home value growth has slowed in recent months as more inventory of for
sale homes has helped meet demand. Nationwide, while inventory remains tight,
the number of homes listed for sale on Zillow was up 5.5% annually in February.

For
the 12 month period from February 2014 to February 2015, national home values
are expected to rise another 3% to approximately $174,285, according to the
Zillow Home Value Forecast.

The
data also shows that national rents rose in February from January, up 0.2% to $1,310.
Year on year, national rents were up 2.8% in January.